Smart Connected Devices Hit Record Levels Even as PCs Decline

In the last year, both desktop and portable PCs experienced declines in both mature and emerging markets worldwide. Meanwhile, smart phones and tablets carried the "smart connected device" category to new highs, topping 1 billion units worldwide, according to a new report released this week by market research firm IDC.

Worldwide Outlook
Smart connected devices include desktop PCs, laptops, tablets, and smart phones. IDC tracks worldwide shipments of these devices by unit and dollar value. For the year 2012, the total number of smart connected devices shipped worldwide hit 1.2 billion units for a total value of $576.9 billion. Overall worldwide growth was 29.1 percent.

"Going forward, IDC expects that tablet shipments will surpass desktop PCs in 2013 and portable PCs in 2014, according to IDC. "In 2013, worldwide desktop PC shipments are expected to drop by 4.3 percent and portable PCs to maintain a flat growth of 0.9 percent. The tablet market, on the other hand, is expected to reach a new high of 190 million shipment units with year-on-year growth of 48.7 percent while the smartphone market is expected to grow 27.2 percent to 918.5 million units."

Overall worldwide growth in smart connected devices is expected to be 21.2 percent in 2013 and 8.5 percent by 2017, with tablets and smart phones continuing to drive growth.

In the fourth quarter specifically, IDC noted, a total of 378 million smart connected devices shipped, with revenues hitting more than $168 billion. In the same period according to IDC, Apple and Samsung led in shipments and dollar volume: "In terms of market share, Apple significantly closed the gap with market leader Samsung in the quarter, as the combination of Apple's iPhone 5 and iPad Mini brought Apple up to 20.3 percent unit shipment share versus 21.2 percent for Samsung. On a revenue basis for the fourth quarter, Apple continued to dominate with 30.7 percent share versus 20.4 percent share for Samsung.

Regional Variations: Mature Markets
In both emerging and mature markets, portable and desktop PCs saw declines, though portable PCs are expected to rebound a bit this year in emerging markets.

In 2012, in mature markets like the United States and Japan, overall growth in smart connected devices was 15.6 percent in 2012, with 2013 forecast at a growth rate of 13.8 percent.

Desktop PCs fell 4.8 percent from 2011; portable PCs fell 8.1 percent. This year, the declines will continue in mature markets, with desktops expected to shed another 5.5 percent off 2012's shipments and portables expected to lose 3.1 percent. Looking further out, desktops will drop another 2.9 percent by 2017, with portables falling off another 1.4 percent.

Meanwhile, tablets saw year-over-year growth of 62.8 percent in 2012. IDC predicted that growth would slow to to 41.4 percent in 2013 and to 8.3 percent in 2017.

Growth in Emerging Markets
In emerging markets, desktops fell off 3.8 percent in 2012 and will lose another 3.5 percent in 2013, though according to IDC that will be the last decline for desktops in emerging markets through 2017. Portable PCs fell a scant 0.8 percent in 2012. By next year, IDC predicted, portables will rise 4.1 percent in units shipped and another 7.1 percent by 2017.

Tablets, however, saw triple-digit growth from 2011 to 2012 in emerging markets, hitting 111.3 percent. IDC indicated that growth would slow in 2013, at 60.7 percent, and hit the low double digits by 2017 (13.4 percent).

Smart phones grew 69.7 percent in emerging markets in 2012 and will also see some slowdown in the coming years: 35.1 percent in 2013 and 12.2 percent by 2017.

Overall, shipments of smart connected devices grew 41.3 percent in 2012 in emerging markets. This year, IDC predicted, that growth would slow to 26.6 percent and slow further to 10.9 percent by 2017.

"In emerging markets, consumer spending typically starts with mobile phones and, in many cases, moves to tablets before PCs," said Megha Saini, research analyst for IDC's Worldwide Smart Connected Device Tracker, ina prepared statement. "The pressure on the PC market is significantly increasing and we can see longer replacement cycles coming into effect very soon and that, too, will put downward pressure on PC sales."

"Consumers and business buyers are now starting to see smartphones, tablets, and PCs as a single continuum of connected devices separated primarily by screen size," added Bob O'Donnell, IDC Program vice president for clients and displays. "Each of these devices is primarily used for data applications and different individuals choose different sets of screen sizes in order to fit their unique needs. These kinds of developments are creating exciting new opportunities that will continue to drive the smart connected devices market forward in a positive way."

The complete report, Smart Connected Device Tracker, can be accessed on IDC's site.